Peter Schiff Slams Federal Reserve's Plan For Buying Treasury Bills: 'QE By Any Other Name Is Still Inflation'

The Federal Reserve's latest move to cut interest rates and resume purchasing Treasury bills has ignited a fierce debate over the trajectory of the U.S. economy.

While mainstream analysts are celebrating signs of a “Goldilocks” soft landing, economist Peter Schiff is issuing a stark warning, branding the new liquidity measures as a dangerous return to quantitative easing.

The ‘QE5’ Warning

Schiff took to social media platform X immediately following the decision, zeroing in on the Fed’s announcement that it would begin buying T-bills “on an ongoing basis.”

Rejecting the central bank‘s technical framing of the move as a liquidity stabilizer, Schiff argued, “QE by any other name is still inflation.”

He predicts the policy will backfire, causing long-term interest rates to rise rather than fall. “It won't be long before the Fed expands and extends QE5 to longer-dated maturities,” Schiff cautioned, ending his critique with a rhetorical push toward hard assets: “Got gold?”

QE by any other name is still inflation. The Fed just announced it will be buying T-bills "on an ongoing basis." Given that long-term rates will rise on this inflationary policy shift, it won't be long before the Fed expands and extends QE5 to longer-dated maturities. Got gold?

— Peter Schiff (@PeterSchiff) December 10, 2025

Wall Street Sees ‘Goldilocks’

Schiff's bearish outlook stands in sharp contrast to the optimism radiating from institutional investors.

Following the 25 basis point rate cut, Jeffrey Roach, Chief Economist for LPL Financial, declared that “Goldilocks is here.”

Roach pointed to the Fed’s updated Summary of Economic Projections, which shows higher growth expectations and lower inflation forecasts for 2026, as evidence that the Fed is successfully balancing its dual mandate.

Gina Bolvin, President of Bolvin Wealth Management, echoed this sentiment, suggesting the Fed is shifting from fighting inflation to managing risk. She views the decision as an attempt to guide the economy toward a soft landing without “oversteering.”

See Also: Michael Burry Says Fed’s New Treasury Buying Plan Shows US Banks Are Weaker Than They Look: ‘Not A Sign Of Strength But A Sign Of Fragility’

Liquidity and Leadership Uncertainty

The specific mechanism drawing Schiff’s ire is the Fed’s plan to purchase approximately $40 billion per month in shorter-maturity Treasuries.

Bill Adams, Chief Economist for Comerica Bank, notes these “Reserve Management Purchase Operations” are intended to smooth volatility in short-term funding markets.

However, Adams also warned that the Fed is operating in a “data vacuum” due to delayed economic releases and faces a looming leadership shakeup when Chair Powell's term ends in May 2026.

As Chris Zaccarelli of Northlight Asset Management noted, while the current mood is optimistic, that “rose-colored” view may fade if investors realize the path to lower rates is slower than anticipated.

Market Delivers Positive Returns In 2025 So Far

The S&P 500 index has advanced 17.35% year-to-date, whereas the Dow Jones index returned 13.36% and the Nasdaq Composite gained 22.68% in the same period.

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, closed higher on Wednesday. The SPY was up 0.66% at $687.57, while the QQQ advanced 0.41% to $627.61, according to Benzinga Pro data.

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• These 10 Stocks Jumped After The Fed’s December Rate Cut

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Domenico Fornas / Shutterstock.com